Boeing Q3 Revenue Rises as Commercial Airplane Profits Fall

Boeing reported higher revenue for the third quarter on Tuesday, but the commercial airplane division saw profits dip. The company delivered 161 commercial aircraft in the period, the highest number since 2018. CEO Kelly Ortberg stated the firm is working to fill a record backlog.

Total company revenue reached $24.2 billion, a 4% increase over the same quarter last year. This growth came despite a less favorable commercial delivery mix, according to CFO Jay Malave. Operating margins rose by 1.5% compared to the previous year.

The Commercial Airplanes division experienced a 3% revenue decrease compared to last year. Operating margins for that division improved but remained negative at -6.5%. Malave attributed the margin change to lower booking rates from production adjustments and higher supply chain costs.

Other divisions showed stronger results. The Defense, Space & Security division saw revenue increase by 15%. The Global Services division reported a 4% revenue increase. These gains helped offset the commercial sector's decline.

Ortberg said the company expects to generate $2 billion in free cash flow in 2026. He projected an additional $1 billion in cash flow for the following year. Those figures include capital expenditures for the U.S. Navy F/A-XX fighter jet program.

The company anticipates larger improvements in 2028 and 2029. Free cash flow is expected to reach $6 billion in 2028 and $10 billion in 2029. Malave noted these targets assume the 777X receives certification by mid-2027. The $10 billion figure relies on higher 737 and 787 deliveries and improved cash margins.

Production of the 737 MAX remains a focal point. The current production rate is 47 planes per month. Ortberg said the line is taking longer to stabilize than anticipated. He aims to reach 52 planes per month with help from the North Line in Everett.

The Everett plant produces the 737 MAX 8, 9, and 10 models. Wings for these planes are built in Renton and transported to Everett for assembly. Ortberg said the company needs to stabilize wing and fuselage production to hit its rate goals. He expects full stability at the current rate to extend into next year.

Boeing's commercial backlog stands at $612 billion, including more than 6,300 planes. New orders in the quarter came from Turkish Airlines, Ethiopian Airlines, and Lufthansa. The company delivered 124 of its most popular 737 models in the quarter.

Malave said the delay in stabilizing production at 47 planes per month will likely result in lower delivery output. The company is expected to fall short of its 500 delivery target for the year. Boeing's stock fell just under 11% on Wednesday morning following the report.